Tech tremors, metals spoil global rally

Tremors in tech stocks spread to Europe on Wednesday, with weaker metals prices also tripping up a rally in world stocks which had taken them to record highs. Investors concerned about high valuations took the top off the tech sector, where stocks such as Facebook, Alphabet, Tencent and Alibaba have reached prices some describe as "eye-watering".

Europe's main index of stocks .MSER tumbled 0.7 percent, led by chipmakers which have been a crucial driver of growth in the sector and seen stellar share price gains this year.

Ken Hsia, European equities portfolio manager at Investec Asset Management, said he had shifted positioning this year from tech into other sectors including financials which he thought would gain from higher yields and fiscal shrinking.

"Their valuations needed something more heroic in terms of the earnings growth they were reporting, and we sold some and rotated that into other parts of the market," he said.

Another negative for the tech sector was a detail of the US tax cut bill being debated in Congress limiting the scope of tax credit key for research and development. MSCI's world equity index, which tracks shares in 47 countries, slipped 0.3 percent, still holding near its latest record high hit a week ago.